Somewhere along the line, the term ‘selling’ has become an unacceptable term associated with financial advisers and the services they deliver. The reason for this has its origin in the evolution of the financial planner and his/her desire to be seen as anything other than a salesperson.
Commencing in the 1970’s, and maturing throughout the 1980’s and 1990’s, many advisers who adopted the mantle of ‘financial planner’, wanted to generate a different image in the eyes of their clients than that held by many consumers who saw them as purely sales-driven operators. And while advisers such as 40-year industry veteran Russell Collins delivered outstanding services to their clients, there were others who were driven purely by maximising product sales on top commission levels. During this period there was a clear need for the Australian financial advice industry to change its approach towards providing services and solutions to consumers.
As the financial planning industry has matured, the general approach towards the delivery of financial services has evolved from product-based advice to solutions-based advice. With this evolution has come a clear delineation:
- Those advisers whose approach focuses on selling products to their clients (the past and the present)
- Those advisers whose advice delivers financial solutions for their clients (the present and the future)
Overwhelmingly, advisers see themselves as the latter – service providers who deliver solutions.
The term ‘selling’ is associated with option 1, that is, product-focussed advisers. This approach is now seen as effectively redundant and because the term ‘selling’ is associated with this approach, it is considered by many to have no place in the modern world of financial advice.
But according to Mr Collins, it was never about selling, but rather about building relationships:
“Our modus operandi was to develop the relationship by asking penetrating questions, listening to the answers and recording the answers in the words of the prospect or client. Their answers dictated the problem areas and our role was to offer solutions to the problems in a manner that allowed the prospect/client to participate in the sales process.”
With the term ‘selling’ becoming unfashionable, Mr Collins believes this void has been filled by the emergence of compliance and technical knowledge. He says that the message to him in his years as a financial adviser was that “… selling is 95% people knowledge and 5% product and technical knowledge – with the rider that we had better know 100% of the 5%! Sadly, over the last decade or so most of the new financial advisers that I meet are trained with the equation reversed, that is, very highly trained in product and technical knowledge, and very limited in communication skills.”
Mr Collins related to riskinfo that in his training workshops it is obvious that inexperienced advisers, once they unravel a need in their clients for insurance, have been trained to offer a product as the solution, while the experienced advisers, once they have established a need for insurance, ask the prospect or client how they intend to solve the problem. That way, the latter participate in the solving of the problem. “That’s when the selling starts!” says Collins.
“It’s not about selling a product; it’s about selling the relationship and the product is at the end of that process. People are going to buy your advice first and your product last. There is daylight in between, and in that daylight is where you develop the relationship.”
“People don’t buy life insurance because they understand the product. They buy life insurance because the financial adviser understands the product. The adviser’s remuneration has nothing to do with how much they know about risk insurance, but rather how well they communicate with people who know nothing about risk insurance!”
Collins regrets the term ‘selling’ is not embraced by the financial advice industry. He considers that today’s prevailing attitude is that if you sell, you can’t be regarded as a professional, but that if you want to be regarded as professional, then you can’t sell:
“There are critics from both within and outside our industry, who think that selling and professionalism are mutually exclusive! If you sell for a living, then you can’t possibly be regarded as a ‘professional’. If you want to be regarded as a ‘professional’, then don’t stoop to selling as a living.”
“The best definition I have ever heard of a ’professional’ was at a Million Dollar Round Table meeting in the mid-80s when the speaker stated, “Professionals are defined not by the business they are in, but by the way they are in business.”
Collins related a comment made to him recently when he was presenting to other advisers. A financial planner challenged him by contending that he (the planner) did not ‘sell’ but instead ‘negotiated’ with his clients. Russell’s response to this assertion was that negotiating is still selling. He invokes Shakespeare’s immortal line from Romeo and Juliet; “That which we call rose by any other name would smell as sweet…”
“We are all sales people,” continued Russell, “What we sell is advice.”
While Collins laments the unpopularity of selling in general (replaced in effect by heightened compliance and technical skills), he regrets in particular the lost art of selling insurance. “People don’t like to talk about death and people don’t like to pay money for something they are never going to see in their life (death cover) or are unlikely to see (TPD, Trauma, Income Protection cover).”
Collins says that no financial adviser should ever be ashamed of the fact they utilise selling skills in order to deliver solutions for their clients, their families and their businesses, as appropriate. This is especially true when it is almost universally accepted that life insurance, by virtue of its intangible nature and underlying purpose, is a product that must be sold and not bought:
“It’s up to financial advisers to introduce the topic of death into the economic equation of their prospects and clients lives. I truly believe that one of the reasons why we have such an underinsurance problem in our country is that there are too many advisers who don’t even bring up the subject of life insurance in their meetings. How they get around the ’know your client’ requirement is beyond me. I think they leave themselves open to litigation at a later date.”
“In fact finds, prepared by people who are compliance-oriented rather than sales or relationship-oriented, it becomes all about templates, ticking boxes, audits and SoA’s,” says Collins.
But buying life insurance is all about character, he says. “People don’t buy life insurance because they are going to die. They buy life insurance so that somebody else can live.” Collins’ point is that completing fact finding templates and ticking boxes is not going to create a conversation about character; “I had a closing rate of nine out of ten, which had more to do with the relationship selling than the transaction itself.”
Collins says we must never forget that our basic risk product – life insurance – has little attraction to impulse buyers. Instead, it appears to bring out all the traits of procrastination that exist in people: “In my opinion, people have not in the past, don’t now, and never will in the future, buy life insurance. It will always have to be sold and the power to persuade is dependent upon the degree to which the financial adviser is trusted.”
The success of an advice practice ultimately gets down to how well a service provider can ‘sell’ or ‘communicate’ their proposition to their client. But it’s not about selling products. Irrespective of the client’s investment or insurance needs, Collins left riskinfo with a concluding comment, which effectively gives permission for all advisers to embrace the term ‘selling’: “We sell peace of mind.”